Snapdeal has received immense backing from Alibaba and Foxconn. (Photo : www.yourstory.com)
Continuing their efforts to reach out to the Indian market, Alibaba Group Holding Ltd. and Foxconn Technology Group have led an investment of $500 million in the Indian e-commerce site, Snapdeal.
The investment increased the five-year-old online marketplace's value to $4.7 billion.
Though Snapdeal did not disclose the breakdown, reports said that Foxconn and its FIH Mobile Ltd. unit will pour in a total of $200 million in exchange for a 4.27-percent company share.
The Indian firm's official statement on Tuesday also revealed that its existing investors--SoftBank Group, Temasek Holdings Pte. Ltd. and BlackRock Inc.--also participated in the investment round.
Currently, Snapdeal is battling with rivals Flipkart Online Services Pvt., a local firm, and with U.S.'s Amazon.com Inc.
These companies have been drawing investors from across the world, eyeing to duplicate Alibaba's success, which held the largest initial public offering to date last year.
Over the past year, Snapdeal was able to raise a more than $5 billion worth of investments, leading to huge discount offerings and hiring of Bollywood stars as its ambassadors.
Earlier in May, CEO and co-founder Kunal Bahl revealed that Snapdeal will continue buying companies as it eyes to become more profitable in two years' time.
For Pragya Singh, VP of consultant Technopak Advisors Pvt.'s retail, "India is among the last truly large markets that is still untapped, so everyone wants to get a stake."
"The competition will go up, everyone will push hard to get more sellers, and there will be lots of discounts and offers to woo customers," Singh added.
The latest deal adds Jack Ma of Alibaba and Terry Gou of Foxconn to the roster of billionaires backing the New Delhi-based company.
